12
AIR TRANSPORT...
density and ready-for-carriage loads—I will describe
briefly what a future rate structure should look like. Cargo
may be divided into three speed-categories.
The first category is express freight. This is the freight
that requires the fastest possible time of delivery from
A to B—and it is booked by flight number, in accordance
with the published timetables.
I would divide this category into six weightbreaks, but
there is no reason why a traffic conference should not
reach agreement on different divisions and weightbreaks:
up to 100kg; 100kg to 300kg; 300kg to 500kg; 500kg to
2,000kg; 2,000kg to 4,000kg; 4,000kg and over.
If this category of cargo is tendered in a ready-for-
carriage device, a certain percentage reduction, say 7 per
cent on the transport cost, would be allowed. This reduc
tion is approximately the cost that the airline would incur
if it had to do the same job.
The second category I will call "regular;" it would be
understood that the airline would have a certain period of
time (and I suggest up to three days over "express" time)
for delivery of this cargo to desination.
It would again be divided into six weightbreaks: up to
500kg; 500kg to 2,000kg; 2,000kg to 4,000kg; 4,000kg to
8,000kg; 8,000kg to 12,000kg; 12,000kg and over.
Ready-to-load refund would however be reduced to
5 per cent. The palletisation cost to the airline would be
lower in this category, as the airline would have had this
cargo longer in its custody and would be able to utilise
manpower more efficiently for its unitisation.
The third category is stand-by. The carrier would have
up to seven days, or any other period to be agreed upon,
over express time for delivery. It would again be divided
into six weightbreaks: up to 500kg; 500kg to 2,000kg;
2,000kg to 4,000kg; 4,000kg to 8,000kg; 8,000kg to 12,000kg:
12,000kg and over.
Refund for unitisation would on the same principle
reduce to 3 per cent.
The last stage of the rating is to allocate a rate per
ton-mile for each of these categories and their sub-sections.
The rating should obviously start with the highest rates
in the express categories and decrease gradually category
by category, step by step, to be lowest in high-volume
stand-by freight. It is, therefore, important to establish
the highest and the lowest rate at the beginning of the
exercise, and again to establish a differential between each
category.
My opinion is that the rates should range from
72 US cents a ton-mile in express under 100kg, to between
13 and 15 cents a ton-mile for the subload over 12 tons
category. The reduction from category to category and step
to step will be directly related to volume and speed of
delivery.
New rate advantages
What are the advantages of such a rate structure, and
how does it fit into the modern trends in the air-cargo
industry, both from the airlines' and shippers' points of
view?
As mentioned earlier, the shipping public, which sponsors
this industry, is really interested in the speed of delivery
and the total cost of transport. A rate structure such as
that suggested would make available to traffic-movement
decision makers alternative rates more consistent with the
urgency and volume of their cargo. It would give the
shipper the option to pay more for what he needs urgently
and pay less if he is not that much in a hurry, irrespective
of the name and nature of his product.
More and more industrial concerns are relocating their
facilities away from home base, either in search of lower
labour costs or seeking proximity to their markets, or
alternatively to avoid import restrictions. The shipping
patterns of these industries are quite elaborate, and the
FLIGHT International, 6 January 1972
air-cargo industry will be able to accommodate a larger
volume of their traffic once we recognise that not all their
cargoes are all that urgent and offer them different rates
for different speeds of delivery.
As for the airlines, it could be an ideal solution to their
load-factor problems, their decreasing yields and their
increasing ground-handling and administrative costs.
I do not profess that this kind of rate structure will make
the dreams of air cargo men come true, but it certainly
has the right ingredients to achieve a reality as near as
possible to the daydream, and to help solve the nightmare
of decreasing yields, low load factors and the high cost of
ground handling. This type of rate structure would have
the following advantages: —
The air-cargo industry is not as unprofitable as some
recent studies have indicated. It has a low profit margin
which can be improved considerably if the ground-handling
costs can be reduced and if pallets or containers can be
loaded to their maximum weight capacity. This kind of
rate structure provides the means for the airlines to have
more time to handle the cargo on the ground. With more
time available manpower can be employed more efficiently
throughout the day, thus reducing considerably the cost
of ground handling.
Specialised airports
The other cost-element of ground handling is the high
rental at present airports. I do not believe that the industry
has yet developed to the point at which it requires all-
cargo airports. Such airports, however, will surely be
required in due course in certain parts of the world. These
specialised airports must be designed to the cargo indus
tries' requirements, rather than being conceived by clever
designers and forced on the cargo industry. Until such
time as all-cargo airports are in use, the airlines will have
to develop air-cargo facilities outside the present airport
premises where the cost of land is considerably cheaper.
The rate structure as described would be especially
suited to the needs of the wide-bodied jets. The large
below-deck capacity is in effect a scheduled freight service
operated out of tune most of the time. A time-
differentiating rate structure might put some rhythm into
it by giving the ground-handling organisations the required
time to fiddle the cargo to the odd containers.
Competition from the non-Iata cargo carriers is steadily
mounting. Unless we rise to the challenge early enough,
the fate of air cargo will be no happier than the well known
predicament of its passenger cousin. Regulations have
already been enacted in certain parts of the world which
will make it difficult to differentiate between a charter and
a regular service. The suggested rate structure puts an
end to this illicit competition.
The air-cargo industry has gradually but surely lost
control of the sales of its own product, while retaining
the ever-increasing cost of its own sales machinery. The
new rate structure should have positive means to regulate
equitably the relations between the carriers and the
forwarding agents. It has always been considered that a
weightbreak rate system is a consolidator's paradise. There
is no reason why we should not create a paradise for some
body else, as long as we can also enjoy some heavenly
rewards.
An increasing number of airports around the world are
imposing night-flying restrictions. These restrictions are
affecting all-cargo flights most of all, owing to the present
established pattern of cargo deliveries. This rate structure
will cause a change in the pattern of cargo deliveries and
facilitate daytime cargo operations.
In closing, I would like to say that every speaker on
the subject of air cargo I have listened to in the past
five years has, in one way or another, emphasised the in
adequacy of the present rate structure. We in lata could
of course ignore these cries of alarm, shy from the trials
and tribulations of drastic change, and keep patching the
present rate structure, as in the past, and hope for the best.
If however we are to accomplish our aims and remain
the leaders of aviation, more imaginative and daring action
should be taken to establish a new rating structure.